Don’t take excessively long-term loans. The interest costs of a 40-year mortgage or a 7-year automobile loan will far outweigh the benefits and the value of the asset will reduce to zilch.
Don’t invests in something you cannot figure out. Get an accountant to explain the fine print of the investment. If it doesn’t make sense, trust your gut instinct and stay away. Ponzi schemes, pyramid rackets and fraudulent fund managers will plunder your savings before you can even say Madoff!
Don’t pay an accountant more than he is worth. Is the value of the advice proportional to his high costs? Check on his credentials before shelling out hefty fees. Can’t someone else do an equally competent job?
Don’t invest all your money in your company shares. That’s like putting your eggs in one basket. If the market hiccups and your business fail, your savings go down the drain. Keep that investment below 10 percent of your portfolio.
Never apply for more than one credit card. The craving for impulsive buying will worsen and burn a huge hole in your finances. Ensure that you repay that one card well before the last date to avoid unnecessary fines.
Don’t liquidate your pension fund to finance your children’s education. They can avail of loans. You won’t be so lucky when you are past your retirement age. Keeping your 401K well-funded allows for long-term growth. That’s a thing you must be careful about.
Don’t buy into investments that promise the sun. Give preference to funds that have performed well last year and give reasonable returns comparable to similar packages.
